In-house facilities management versus outsourced facilities management

Posted in: Facilities Management

In a previous blog, we explored the reasons why a business might consider outsourcing their facilities management. We thought we’d look at the flipside of this topic. In fact, we decided that it was worth pitting both options against each other.

So welcome to our heavy-weight FM title fight, where in-house facilities management will face off against outsourced facilities management services in a fight to the death!

Okay, slight exaggeration.

We’ve put together a helpful summary of the key advantages and disadvantages when it comes to in-house FM versus outsourced FM.

Facilities management resource & costs

In-house Facilities Management Advantages

• You will be able to control and influence the staff member who will fill the role.
• You can manage where, when and what in-house staff do.
• An individual who is based within the business will be easy to contact during working hours and dedicated solely to the needs of the business.
• There will be a fixed staff cost.

In-house Facilities Management Disadvantages

• If only one member of staff is responsible for FM activity, holiday cover will need to be taken into consideration and there will always be a risk of them leaving the business.
• One person can’t be in more than one place at a time and they are unlikely to be available out of office hours, 24/7.
• A full or part-time member of staff will incur additional costs covering IT, company car, phone, etc.
• The buying power to procure third-party contracted works will be limited to the size of the company.

Outsourced Facilities Management Advantages

• An outsourced FM team will consist of multiple team members and, in the case of larger FM companies with sites across the UK, they can also cover different sections of the country simultaneously.
• With additional office admin on hand to answer any queries and, in many cases, access to a 24/7 emergency helpline, someone will always be available to help.
• Working to a fixed retainer, you’ll have the flexibility to scale costs and resource up or down depending on the needs of your business.
• An outsourced FM company’s buying power is likely to be greater when procuring specialist sub-contractors, increasing the likelihood of reducing costs.

Outsourced Facilities Management Disadvantages

• You’ll have less control over staff selection and, while the account would have dedicated staff, these staff members may plan site visits alongside other clients’ sites.
• Costs will be variable from project to project when considering larger refurbishment projects.

Facilities management experience, skills & qualifications

In-house Facilities Management Advantages

• You’ll be able to recruit someone with significant experience.
• At the interview stage, you can select staff that match the culture of your business.
• Once appointed, staff can receive additional training and achieve new qualifications.

In-house Facilities Management Disadvantages

• In order to recruit someone with significant levels of experience, you’ll need to offer a competitive salary and there is a growing skills shortage within the FM industry.
• The skill set will be limited to the ability of one person, therefore further training may be required.
• Further training may be costly and time-consuming.

Outsourced Facilities Management Advantages

• You’ll gain access to a versatile skill set across a wider team with further expertise to call upon when required.
• An outsourced team is likely to consist of highly-qualified staff recognised by both the Institute of Workplace Facilities Management (IWFM) and the Royal Institution of Chartered Surveyors (RICS).
• You’ll have access to advice as well as updates on new legislation and guidance.

Outsourced Facilities Management Disadvantages

• The external team may take longer to learn your company’s commercial values.

Facilities management liability and Health & Safety

In-house Facilities Management Advantages

• You’ll be able to utilise the in-house H&S team’s knowledge and expertise.

In-house Facilities Management Disadvantages

• Full liability will fall to in-house members of staff, some of whom may not have the required understanding or competence.

Outsourced Facilities Management Advantages

• An outsourced FM company will have liability for the delivered services.
• In addition to the usual PL/EL insurance cover, they will also hold Professional Indemnity Insurance.

Outsourced Facilities Management Disadvantages

• You will still need to check that the outsourced company is performing their duties to the required levels.

Facilities management IT

In-house Facilities Management Advantages

• You could use your own in-house IT team to develop FM software for your own business needs or purchase off-the-shelf software.

In-house Facilities Management Disadvantages

• Both in-house IT development and purchasing off-the-shelf software can be very costly and time-consuming.
• There is unlikely to be both the IT and FM expertise within your business for the software to be developed enough to meet specific industry requirements that constantly change and need updating to ensure compliance is achieved.

Outsourced Facilities Management Advantages

• You’ll gain access to software containing a comprehensive FM database. Although you’ll need to check if you will be given free access.

Outsourced Facilities Management Disadvantages

• Software development may be required if you ask for bespoke changes to the software.

What’s next?

Over the last decade, there has been a trend towards both small and large organisations outsourcing their facilities management.

While some businesses may find that they can save money outsourcing FM, in our experience the costs for in-house versus outsource options are very similar.

However, as you can see from the advantages and disadvantages that we’ve highlighted, outsourcing is often a lot more beneficial in a number of other ways when compared to the in-house option.

Since every case is different, at TPG we always like to gain as much information as possible regarding the scope of services required before we can advise on the best solution for a business.

If you’d like further guidance on which option might be best for your business, contact the team at TPG today.